3-Feb-2020: Money earned in India by NRIs will be taxed

The Finance Bill proposed major policy changes to prevent tax abuse by citizens who don’t pay taxes anywhere in the world. One such proposal was to tax Indian citizens staying abroad if they are not taxable in their home country.

There were concerns that this provision would bring Indian workers’ income in zero-tax jurisdictions, like the UAE, into the Indian tax net.

Kerala Chief Minister had expressed strong disagreement over the provision amid concerns that it will hurt Indians working in the Middle East, who are contributing foreign exchange to the country through remittances.

The Finance Minister has sought to allay fears by clarifying that only money earned in India by NRIs will be taxed. Notably, only income derived from an Indian business or profession will be taxable for such citizens.